BlackBerry unveils new phone and reverses...
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Jun 19, 2014  |  Vote 0    0

BlackBerry unveils new phone and reverses financial plunge with $23m profit

Shares jump 14 per cent in early trading as adjusted loss is less than half what was expected


WATERLOO - BlackBerry Ltd. has unveiled a QWERTY smartphone called the Passport to be launched at an event in London in September.

“It’s either the world’s smallest phablet or its biggest smartphone,” chief executive John Chen said as he showed off the 4.5 inch device at the company’s annual shareholders meeting in Waterloo Thursday. He also said BBM for Windows phone will launch next month.

The meeting drew a sparse crowd compared to last year’s event when then chief executive Thorsten Heins faced a packed auditorium of impatient shareholders.

“Respectfully irritated” was the way investor was the way one investor described some of the verbal feedback given to BlackBerry’s board of during the 2013 meeting after the company had reported a wider-than-expected loss.

This year, the formal part of the meeting was brief, reflecting BlackBery’s improved performance under new CEO John Chen. During a question-and-answer session two shareholders congratulated Chen on his turnaround work .

BlackBerry earlier on Thursday posted a narrower-than-expected quarterly loss, an unimproved profit margin and an increase in its cash on hand as the company reported a boost in income from software and services to business customer amid declining sales of its consumer smart phones.

“We think we have a good handle on stabilizing the company,” Chen, who replaced Heins seven months ago, told the meeting. He said the company posted a small net profit in its fiscal 2015 first quarter according to GAAP and has reduced its costs and cash burn. Chen also unveiled the company’s smartphone product roadmap for fiscal 2015.

Earlierin a release the company in a release reported a first-quarter profit of $23 million or four cents per share, compared with a loss of $84 million or 16 cents a year ago.

An adjusted loss of 11 cents per share beat the analyst estimate of 28 cents.

Shares jumped nearly 10 per cent in pre-market trading in New York, financial reports said.

BlackBerry reported its first loss on June 28, 2012, after seven years of soaring success that turned it into an icon of the corporate world

Revenue fell to $966 million for the three months ended May 31 compared with $3.07 billion a year ago. It was still down $10 million or 1 per cent from $976 million in the previous quarter.

The revenue breakdown for the quarter was 39 per cent for hardware, 54 per cent for services and 7 per cent for software and other revenue.

Chief Executive Officer John Chen, who took over in November, is limiting the company’s dependence on its declining smartphone business while trimming expenses and focusing on business customers, software and mobile services like its BBM instant messaging.

The shift is key to Chen’s goal of returning the company to profit by the fiscal year that ends in March 2016 as he tries “to save the patient.”

Last month he said the odds of a turnaround were 80-20, up from a previous prognosis of 50-50.

“This shows stability in the business,” said Daniel Chan, an analyst with Scotia Capital in Toronto.

“If this goes right, growth could be the next stage,” he said.

CEO Chen’s cost-cutting campaign has included selling most of the Waterloo-based company’s property, eliminating jobs and moving phone production to Foxconn.

The cash and investments balance of $3.1 billion at the end of the fiscal first quarter was up from $2.7 billion in the prior quarter.

Adjusted Q1 gross margin was 48 per cent, up from 43 per cent in the prior quarter.

- With files from The Star’s wire services

Toronto Star

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